'Positive developments' expected after IMF mission to Senegal, source says

Discussions between Senegal's government and the International Monetary Fund have been constructive and "positive developments" are expected at the conclusion of a ‌mission on Tuesday, a person close to the matter told Reuters on Monday. The fund began its current mission on August 19 as part of talks about a replacement loan for the $1.8 billion programme it suspended in 2024 after President ‌Bassirou Diomaye Faye's government disclosed far more debt than previously reported.

The talks have been contentious, with former Prime ‌Minister Ousmane Sonko saying in November that the IMF was pushing for restructuring and that such a move would be a "disgrace". Faye fired Sonko in May, but Sonko was subsequently appointed president of the National Assembly, a post that could permit him to complicate implementation of reforms ⁠required under a ​new IMF programme.

"The mission ⁠has made substantial progress, and discussions with the authorities continue in a constructive spirit. As with any IMF-supported programme, any Staff-Level Agreement would be announced ⁠through the Fund's established processes," an IMF spokesperson said. "Fund staff and the authorities are working closely to conclude the remaining elements ​and ensure that any eventual agreement rests on a strong and durable foundation."

The IMF has estimated the ⁠extra debt disclosed in 2024 at more than $11 billion based on end-2023 numbers. Some analysts put it closer to $13 billion, more than a quarter ⁠of ​total debt. To secure an IMF programme, Senegal needs to address the "hidden debt" fallout, agree upon a credible plan to stabilise its finances and resolve how to deal with its debt burden.

Senegal last received financing ⁠from the IMF in late 2023. Since then, the government has relied on regional markets and retail bond sales to ⁠fill the gap left ⁠by the absence of cash from the fund and other concessional financing. Global credit ratings agency Moody's downgraded Senegal's rating to "Caa2" from "Caa1" on Friday, citing rising refinancing risks and limited scope ‌for debt reduction.